Land Use Regulation Harms the Poor

Mr. Siegan is the author of Land Use Without Zoningand many articles on the subject. He practiced law for 20 years in Chicago before moving in 1973 to La Jolla, California where he is professor of law at the University of San Diego Law School.

A strange Phenomenon of our times is the attitude of local officeholders who identify themselves with the cause of the poor and at the same time insist on curbing growth. Here in San Diego, for example, many politicians whose hearts continually bleed for the downtrodden are among the strongest supporters of a restricted growth policy, which can only be harmful to the poor.

The two positions are totally incompatible, and one begins to wonder how genuine their commitment — and to whom or to what. The answer may lie, of course, in the working of both sides of the political street, plying the rich and young with "no growth" promises and the poor with lots of rhetoric. Plainly, these politicians are not heeding the advice of the bumper stickers that urge us to "eschew obfuscation."

Friends of the poor should be working hard to overcome governmental restrictions that curtail production; and some are. One public body that recently adopted a clear position on the issue is the San Diego County Board of Public Welfare. On May 2, in a written recommendation to the county’s Board of Supervisors, it said the slow growth policies of the city and county were "at cross purposes with the goals and objectives of the Board of Public Welfare."

Its statement continues: "The elimination of poor or substandard housing accommodations demands an immediate change in the county’s growth policy. This policy is acting to restrict the supply of housing available to poor people."

Regarding the means for achieving satisfactory housing for the poor, the statement discussed both subsidized and privately financed housing and concluded that the former has not been particularly successful: "It is very expensive and has served only a small proportion of those in need."

The Board referred to a report made by the Federal Department of Housing and Urban Development that the average subsidized apartment unit cost 20 per cent more to construct than a comparable unit privately financed. This meant, the Welfare Board reasoned, that 20 per cent fewer dwellings could be built by the government than if the same amount of money had been invested in the private market.

It concluded that: "The greatest hope for improving the living conditions of the ill-housed poor in our community, and at the same time substantially relieving the financial burden placed on the Board of Supervisor’s budget (and the taxpayers of San Diego) appears to be through the private market; specifically through the filtering process."

Filtering is the chain of moves to new or different living quarters triggered by the construction and occupancy of a new unit. The leading source available on this process is the study conducted by the Survey Research Center at the University of Michigan, published as a monograph, New Homes and Poor People.

This study, conducted in 17 metropolitan areas in the mid-1960′s, determined that for every 1000 new housing units built, there are over 3500 relocations, of which an average of 330 are by families defined as poor and 950 by moderate income families, the next lowest economic category. The moves will be made to presumably better housing on the assumption that "if they move, they benefit." The Welfare Board considers the filtering process "the only proven viable provider of low cost housing for low and moderate income families."

According to the Board, the number of building permits issued in San Diego County in 1974 was 24,000 fewer than in 1972. Of the reasons cited for the decrease, one was the restricted growth policy.

THE FREEMAN

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CURRENT ISSUE

December 2014

Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.